{"id":11120,"date":"2018-08-31T07:30:31","date_gmt":"2018-08-31T11:30:31","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=11120"},"modified":"2018-08-31T07:30:31","modified_gmt":"2018-08-31T11:30:31","slug":"how-the-vix-rally-starts","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/how-the-vix-rally-starts\/","title":{"rendered":"How the VIX Rally Starts"},"content":{"rendered":"

The Volatility Index (VIX<\/a>) spiked 10% higher yesterday. This looks like the start of a much bigger move.<\/p>\n

We looked at the VIX last week<\/a> and came away thinking there was the potential for a sharp, sudden rise in the index.<\/p>\n

It took a few days longer than I expected it to. But, after yesterday’s spike, it looks like the VIX rally is underway.<\/p>\n

Here’s an updated look at the 60-minute chart of the VIX…<\/p>\n

\"\"<\/p>\n

The VIX moved lower last week while the MACD momentum indicator<\/a> pressed higher. This sort of “positive divergence” on the MACD often signals the potential for a change in trend.<\/p>\n

You can see how similar conditions earlier this month preceded a sharp and sudden spike higher in the VIX. The index rallied from about 11 all the way up over 16. A similar spike of 50% this time around could pop the VIX as high as 18 or so.<\/p>\n

That’s the same target we get on the daily chart of the VIX. Take a look…<\/p>\n

\"\"<\/p>\n

The drop in the VIX earlier this week completed the right shoulder of an inverted head and shoulders pattern. This is a potentially bullish pattern.<\/p>\n

If the VIX can rally above the “neckline” of the pattern (the first red resistance line) at about 15, then that opens the door to a move towards 18 or so. That sort of a spike in volatility would almost certainly coincide with a sharp move lower in the stock market.<\/p>\n

When the VIX spiked earlier this month, the S&P 500 lost 70 points in just a few days. A similar move this time could have the index trading back down to the 2840 level by the middle of next week.<\/p>\n

Best regards and good trading,<\/p>\n

<\/p>\n

Jeff Clark<\/p>\n

Reader Mailbag<\/strong><\/h2>\n

Where does this market go next? And more importantly, how are you prepared?<\/p>\n

As always, let us know<\/a>…<\/p>\n","protected":false},"excerpt":{"rendered":"

Here’s how the VIX rally gets started…<\/p>\n","protected":false},"author":34,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-11120","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/11120","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/34"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=11120"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/11120\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=11120"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=11120"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=11120"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=11120"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=11120"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=11120"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=11120"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}